Majority of Distributors Says Business Remains Strong (Part 1)

Annual survey: Nearly 64% of those polled say 2016 business better than 2015

CHICAGO — While the share of distributors reporting their business had improved year-to-year was down slightly, the results of American Coin-Op’s annual Distributors Survey illustrates that business remains quite strong. The majority polled once again enjoyed better business than the previous year, and is expecting overall 2017 sales to surpass those of 2016.

Slightly less than two-thirds of distributors polled (63.6%) say that business—including sales of newly constructed vended laundries and replacement business—was better in 2016 compared to 2015. When it comes to sales projections, a slightly larger share (64.4%) believes 2017 sales will be better than 2016’s.

Just 13.6% of respondents say 2016 business was worse than 2015’s, while 22.7% say that business has stayed the same.

Distributors listed in the previous edition of the American Coin-Op Distributors Directory were invited to participate in this year’s unscientific survey, which charts 2016 business and makes comparisons to previous years. In this three-part summary report, percentages may not add up to 100% due to rounding.

2016 BUSINESS

This year, 63.6% of distributors who were polled said business was better in 2016 than 2015. That’s down slightly from last year’s report in which 67.4% of distributors said 2015 business was better than 2014. In the 2015 survey, 68.3% of respondents said 2014 business was better than 2013.

Those who described their business in 2016 as “better” attributed their performance to a stronger economy; the attractiveness of energy-efficient equipment; store owners desiring to replace outdated machines; businessmen looking to start vended laundry operations as investment opportunities; and hiring additional sales and installation staff, among other reasons.

The minority whose business suffered in 2016 said factors like increasing water/sewer costs, impact fees, higher rents, and manufacturers selling direct to consumers took a toll on their company’s performance.

REPLACEMENT BUSINESS

Roughly 62% of distributors say their replacement business was up in 2016 compared to 2015. This is comparable to last year’s survey in which approximately 64% of distributors reported better 2015-to-2014 replacement business. It’s well behind the 73.2% of distributors who saw their replacement business increase in 2014 from 2013.

Roughly 7% of respondents say they saw 2016 replacement business decrease from that of 2015, while 31% say it remained unchanged.

NEW-LAUNDRY CONSTRUCTION

American Coin-Op asked distributors to list the number of new laundries they built and/or to which they supplied equipment in 2016.

In the survey, the share of distributors that built and/or supplied equipment to three or fewer stores was fairly balanced with the share that did the same to four or more stores. Companies building or supplying equipment to three or fewer new laundries in 2016 accounted for 48.8% of the total. In comparison to previous surveys, that number was 40.5% in 2015, 69.2% in 2014, 54% in 2013 and 55% in 2012.

Companies building or supplying equipment to four or more new laundries in 2016 accounted for 51.2% of the total. In 2015, that number was 59.5%.

The actual number of new laundries that distributors were involved with in some way in 2016 ranged from just a single store to one respondent reporting his/her company dealt with 174 stores.

Following is a rundown of the most popular answers from this year’s survey:

1) 2

2) 5

3) 1, 3 and 4 (tie)

One-third of distributors surveyed (33.3%) said their new-construction total for 2016 was higher than the previous year. Comparing to previous surveys, approximately 35% said their new-construction business was up for 2015; roughly 48% said it was up for 2014; and approximately 39% said it was up for 2013.

Roughly 38% of distributors surveyed said their new-construction total for 2016 remained the same as 2015. That compares to approximately 41% of distributors reporting no change in 2015 from 2014, roughly 38% reporting no change in 2014 from 2013, and 43.9% reporting no change in 2013 from 2012.

Roughly 29% of distributors said their new-construction total was lower in 2016 than in 2015, which is up from the roughly 24% who reported lower new-construction totals in 2015 from 2014. Earlier surveys showed 15% with lower totals in 2014 than in 2013, 17% with lower totals in 2013 than in 2012, and 35.3% with lower totals in 2012 than in 2011.

Check back Thursday for Part 2: Equipment mix and store size trends

About the author

Bruce Beggs is editorial director of American Trade Magazines LLC, including American Coin-Op, American Drycleaner and American Laundry News. He was the editor of American Laundry News from November 1999 to May 2011. Beggs has worked as a newspaper reporter/editor and magazine editor since graduating from Kansas State University in 1986 with a bachelor’s degree in journalism and mass communications. He and his wife, Sandy, have two children.